Labor's Day Off

By Steven A. Camarota on September 2, 1996

Chicago Tribune, September 2, 1996

Each Labor Day we celebrate the hard work and diligence of American workers. However, for many American workers, like Matt who lives in Trenton, N.J., there is little cause to celebrate. Matt works in a mail room, and despite having a strong work ethic, he has been laid off three times in the last four years and still makes no more than he did five years ago. Like many workers in the United States without a college degree, he can find a job, but not necessarily one that pays a decent wage. And getting a raise that beats the inflation rate happens once in a blue moon.

Matt, of course, is not alone. Official Bureau of Labor Statistics data indicate that the real earnings (adjusting for inflation) of workers without a college degree have declined by between 15 and 30 percent over the last 17 years. This represents a dramatic decline in real purchasing power. Additionally, the gap between workers with a college degree and those without widened by 33 percent between 1979 and 1995.

What explains the economic difficulties of workers like Matt? Economic research has identified several causes. Such factors as corporate downsizing due to the globalization of the economy, technological changes and the loss of union jobs have been examined at length in the media. However, the issue of how immigration suppresses wages seems to have gotten lost amid all the talk about border control and welfare benefits for non-citizen immigrants.

There is now an emerging body of evidence that admitting 700,00 to 900,000 immigrants and tolerating an additional 300,000 new illegal immigrants each year suppresses the wages of workers like Matt.

Over the last few years, studies done separately by scholars at Harvard, the University of California at Riverside, the University of Chicago and the Bureau of Labor Statistics all indicate that immigration has significantly contributed to the rise of income inequality between high- and low-income families.

Additionally, my own research indicates that the wages of workers in lower-skilled occupations have been reduced by more than 10 percent as a direct result of immigration.

The view that immigration is reducing wages and contributing significantly to income inequality is now accepted both by the Council of Economic Advisers and in the recent Census Bureau report on income inequality.

Research has also indicated that because we now live in a national economy, where people change jobs and relocate often, immigration can have a negative effect on earnings for working men and women throughout the country, not just in high-immigrant areas.

There are those who argue that immigrants take only jobs Americans don't want. This is simply incorrect. Government data shows that immigrants are spread across almost all occupations, and hold jobs in such better-paying occupations as construction and manufacturing, which are generally done by workers who do not have a college degree. While it is true that a small proportion of immigrants are concentrated in some menial low-paying jobs such as janitorial work, the research cited above strongly suggests that these jobs would not be so low-paying and unattractive to natives if immigrants had not flooded them.

On this Labor Day we will inevitably hear the political candidates lamenting that many Americans are working harder for less money. However, working people like Matt do not need patronizing political rhetoric. Nor do they need to hear that all is well with millions of new jobs created and an expanding gross national product.

The fact is that overall economic growth does not necessarily mean that working class people are doing better. What Matt and millions of workers like him need, is for the federal government to stop embracing an immigration policy that drives down their wages and makes it difficult for them to get ahead or even stay afloat. And an immigration policy, unlike other causes of wage suppression, such as technological change, is an area the government can actually do something about.

It is no surprise that those who speak for the business community, such as The Wall Street Journal, advocate mass immigration. After all, no one has ever confused them with advocates for the working class. However, liberal advocates of mass immigration, such as Sen. Edward Kennedy (D-Mass.), who normally side with working people, must take their heads out of the sand and at least examine the new research on this issue. They must understand that we need to strike the right balance between our desire to admit new immigrants and our commitment to ensuring that the working men and women of this country can earn a living wage.